FHA Loses Fight to Increase Down Payment Requirement from 3.5% to 5%

Thanks to the NAMB (National Association of Mortgage Brokers), the fight to hold the minimum down payment for a FHA purchase at 3.5% instead of bumping it up to 5%, has been won. Today, the fight turns focus to keeping the annual mortgage insurance costs that FHA charges on loans at .55% instead of moving it up considerably. The mortgage insurance is calculated by multiplying .55% times the loan amount, and then divide that by 12 to get your monthly cost.
My worries about this aren’t that it just goes up, but typically this is not something that is temporary…once the market regains strength, why should everyone continue to pay the high cost for mortgage insurance. After all, why not wait a little while and see if all the new changes help offset troubles first. Like that commercial says, “this is how FHA sticks it to the man”, but this time, American home buyers are “the man”. To hear a live version of the story, go to the Think Big Work Small website.